Explained: Are Chelsea Women really worth £200million?

Chelsea Women are the most valuable women’s team in world football.

They were sold for £200million, surpassing the $250m (£188.5m) Willow Bay and Bob Iger paid to buy National Women’s Soccer League (NWSL) side Angel City in 2024.

The only issue with the price Chelsea Women was sold for was that they were bought by their parent company in a move that helped the men’s team comply with the Premier League’s profit and sustainability rules (PSR) in 2023-24.

Chelsea transferred ownership of their women’s team to Blueco 22 Midco Limited on June 28, just two days before the 2023-24 accounts were due to be registered, and booked a £198.7m profit from the sale.

The £200m sale is now being scrutinised by the Premier League from a fair market value perspective — and the profit Chelsea lodged as a result may be adjusted if they are deemed to have inflated Chelsea Women’s price.

The Athletic answers the key questions about the transaction…

What can we learn from Chelsea Women’s accounts?

For the financial year ended June 30, 2024, Chelsea Women generated £11.5m in revenues and made a loss of £8.7m.

Although a breakdown is not provided in the accounts, it is noted that a significant portion of the £11.5m in revenues comes via TV broadcasting and matchday income and commercial activities.

There is not a blanket approach when it comes to valuing a football club, but revenue multiples are the most common method. Given they had revenues of just over £11m in 2023-24, the £200m sale price meant they were valued at more than a 17x revenue multiple.

In comparison, when the Glazer family sold a minority stake (27.7 per cent) in Manchester United to Sir Jim Ratcliffe in February 2024 for £1.3billion, that was just over a 10x revenue multiple, which was considered high at the time.

“Football club valuations are notoriously complex, with no one-size-fits-all approach due to the many variables at play — ranging from fanbase and brand image to infrastructure and league-specific factors,” explains Simon Van Kerckhoven, founder of Brussels-based Zurafa Football Capital and former chief operating officer at City Football Group’s Belgian side Lommel.

“While revenue multiples remain the most common method, benchmarks vary significantly by country and league. In Belgium, for instance, we typically see multipliers between 1.2 and 1.8, rising to around 2.0 in the Netherlands and up to 4.0 in the Premier League — reaching 6 to 10 only for the top six clubs.

“The Manchester United transaction at a 10.6x multiple was already considered an exceptional case. The recent £200m valuation of Chelsea FC Women at an almost 20x revenue multiple is, therefore, highly unorthodox.”

What do other industry experts think of the £200m valuation?

As you would expect, there has been a mixed reaction.

“On first glance, Chelsea Women being valued at £200m might seem quite high for a company with under £15m in revenue last season, but the long-term case for investment in women’s football is strong,” Jordan Gardner, a global football club management and investment strategy consultant at Twenty First Group, tells The Athletic.

“NWSL expansion clubs starting from scratch are selling for well over $100m and are only going up. In comparison, Chelsea have incredible existing brand equity value, and it could be argued that £200m is undervalued when taking into account the upside opportunity leveraging the history and attractive location of the club, alongside the growth of the WSL.

“It will take sustained investment and attention to the women’s product — or a joint venture with a sophisticated partner experienced in the women’s game — for Chelsea to truly capture the value of that asset.”

“Everyone thinks it’s a happy PSR fudge,” explained a source — speaking on the condition of anonymity to protect relationships — involved in the acquisition of football clubs.

“Everyone is saying it’s a PSR fudge which is: a) an outcome that is a benefit no doubt — none of us are naive — but b) is really disrespectful to the women’s game that cannot grow unless it’s given appropriate and significant focus.”

Laurie Pinto, the founder of Pinto Capital and a veteran of the sports mergers and acquisitions (M&A) industry, believes the devil will be in the details.

“£200million is a big number but that’s kind of the point,” Pinto says. “For some investors, these things are about marketing. They want the big brands, they want to hang out with the big names and go to the big matches.

“Chelsea have just signed the first $1million player in the women’s game (Naomi Girma) and they have the best address in London. Todd Boehly would be very impressive in meetings and they might win the Champions League. Chelsea are always going to attract a lot more interest than Charlton, for example.

“The question will be what assets are you putting into the deal. If it’s just the team, that is a stretch. But if it includes their stadium at Kingsmeadow or some long-term access agreement at Stamford Bridge, or wherever the men end up playing, well, the investment gets more attractive.”

Girma cost $1m (Harriet Lander – Chelsea FC/Chelsea FC via Getty Images)

Another M&A source, speaking on condition of anonymity to protect relationships, has a different view.

“There is no business case for this valuation at all,” they said. “It’s not a tech stock. It’s not a company that might cure cancer. What are we even talking about here? None of these teams is even close to making any money.

“There are lots of very well-meaning people in women’s football at the moment and I respect them. A £200m valuation for any women’s football team makes no sense at all.”

How have Chelsea justified the sale price?

It is worth remembering that Behdad Eghbali’s Clearlake Capital and Boehly, Chelsea’s co-owners, are looking to sell a stake in the women’s team.

To help aid this process, Chelsea Women are now operating independently from the men’s team and appointed Aki Mandhar, formerly of The Athletic, as their first-ever dedicated CEO.

Valuing Chelsea Women at £200m should, in theory, only help to drive up the price. BDT & MSD Partners, a global merchant bank, has been engaged as a financial advisor on a potential minority investment in Chelsea Women.

There are at least two interested parties The Athletic is aware of, with one being Monarch Collective.

Chelsea sources, speaking on the condition of anonymity to protect relationships, have told The Athletic that ultimately the market will dictate the price and that a competitive process is taking place in regards to who buys the minority stake.

Chelsea Women are seeking a minority shareholder with expertise to help grow the club, taking advantage of the potential for significant commercial opportunities, as well as creating dedicated facilities and infrastructure.

They added that there is interest from multiple parties in a deal that would take Chelsea Women’s overall valuation beyond what Angel City sold for last year — something it already is, given the price they sold it to themselves for.

If, for example, a company spends £20m on a 10 per cent stake in Chelsea Women, then that will justify the £200m figure that has raised eyebrows.

What does the Premier League think?

Chelsea’s accounts for 2023-24 included a line that stated the sale of their women’s team to the parent company is being assessed by the Premier League.

And as a consequence of the fair market value assessment, Chelsea outlined that “the conclusion of this process may result in a material change to the gain recognised”.

This is not the Premier League choosing to unfairly scrutinise the club, though. The same probe would be made for the other 19 top-flight teams as part of the fair market value regulations, which are laid out in detail in the Premier League’s rulebook.

How will the Premier League determine if it is fair market value?

The first thing to mention is that whether Chelsea inflated the price of their women’s team or not will not be decided by an independent panel.

The Premier League’s board, which consists of Richard Masters, the chief executive, Alison Brittain, the chairperson, and three independent non-executive directors (Mai Fyfield, Dharmash Mistry, Matthew Ryder KC), has the ultimate say.

However, there are multiple strands to which the information is collected for the board to make its decision.

That includes the opinion of an external specialist who will have a view, the league’s Databank (a system that includes all the information relating to the clubs’ commercial deals and player transfers) and the information Chelsea submit to the league as part of the transaction.

This means the board will generally have a wide view from different sources of what the value of a deal should be worth and make a decision based on that.

Should the Premier League board decide to knock money off the sale price, then it will be detailed in the accounts for the year ended June 30, 2025.

Don’t Chelsea and the Premier League have previous on associated party transactions?

In 2022-23, Chelsea sold two hotels — the Millennium and Copthorne — to a sister company for a combined £76.5m.

Chelsea sold the Millennium hotel in their 2022-23 accounts (John Walton/PA Images via Getty Images)

The Premier League, as it is doing now with Chelsea Women, assessed whether those deals were fair market value.

After the 2022-23 accounts had been published, The Athletic reported how the Premier League had adjusted the value of the sales.

And the latest accounts show that — in July 2024 — the league reduced the profit from the hotel sales by £6m.

What happens next?

If the Premier League decides the sale was not fair market value, then it will be detailed in the next set of accounts, which are not due to be published until next year.

There will be a note in Chelsea’s accounts — as there was this year in relation to the hotel sales — detailing if an adjustment has been made to the price.

But if the Premier League is satisfied with the transaction, then there is no need for that to be documented in the accounts.

(Top photo: Peter Nicholls/Getty Images)

[ad_1]

_{Images are for reference only.Images and contents gathered automatic from google or 3rd party sources.All rights on the images and contents are with their legal original owners.}

[ad_2]